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CS Professional · Insolvency and Bankruptcy - Law and Practice · Resolution Strategies (Elective 7.5)

Vistara Components Ltd is in CIRP. At the first meeting of the committee of creditors (CoC), the resolution professional (RP) tables a Going Concern Assessment Report covering estimated income, expenditure, cash flows, working capital needs and risks of value erosion. What is the CoC expected to do on the basis of this report?

The CoC decides, based on the Going Concern Assessment Report placed by the RP at its first meeting, whether the corporate debtor's operations will be continued and, if so, the scope and duration of those operations.

  1. ADecide whether operations of the corporate debtor will continue and, if so, the scope and duration of such operationsCorrect
  2. BAsk the Adjudicating Authority to decide whether operations should continue
  3. CLeave the decision on continuing operations entirely to the suspended board of directors
  4. DApprove the resolution plan for the corporate debtor immediately

Explanation

Under Regulation 31B(3), the RP places the Going Concern Assessment Report at the first CoC meeting and, based on it, the committee decides whether operations continue and the scope and duration. The Adjudicating Authority and the suspended board have no such role in this decision. Approving a plan is a separate, later step.

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